Peoples Bancorp's Q4 2024: Strong Earnings Growth Amid Shifting Loan Portfolios and Rising Expenses

Financial Performance and Earnings Growth:
- Peoples Bancorp reported diluted earnings per share of $0.76 for Q4 and $3.31 for the full year of 2024.
- The growth was driven by a 3% increase in net interest income, a 58% efficiency ratio, and a 5% improvement in book value per share to $31.26.

Loan Portfolio and Credit Quality Trends:
- The company's Commercial and Industrial Loans increased by $163 million, growing from 19% to 21% of their portfolio, while Commercial Real Estate Loans declined from 36% to 34%.
- The decline in commercial real estate loans was attributed to a shift in the loan portfolio mix and stable credit quality, with criticized loans improving to 25% of total risk-based capital.

Fee-Based Income and Non-Interest Expense:
- Fee-based income grew by 10% for the full year, driven by higher commercial loan swap fees and improvements in lease, trust, and investment income.
- Non-interest expenses increased by 3%, primarily due to higher non-core expenses, partially offset by lower acquisition-related expenses.

Deposit Base and Interest Rate Management:
- Deposit balance grew by $443 million or 6%, with a loan-to-deposit ratio of 84%.
- The company reduced interest-bearing deposit costs by 6 basis points and paid off borrowing from the Bank Term Funding Program, contributing to a reduction in short-term borrowing costs.